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And finally, the IRS gets audited!

Federal agency that strikes fear into U.S. taxpayers getting dose
of own medicine

Chelsea Schilling is a
commentary editor and staff writer for WND, an editor of Jerome Corsi's Red Alert, and a proud
homeschooling mother. Schilling joined the Army at age 17, receiving the
exceptional designation of expert marksman three times. In addition to WND,
Schilling has worked as a news producer at USA Radio Network and as a news
reporter for the Sacramento Union.More ↓Less ↑

The federal agency that strikes fear into many U.S. taxpayers is getting a
dose of its own medicine – as it is now the focus of a year-long audit for
allowing illegal aliens to scam the system and bilk taxpayers out of billions of
dollars every year.

Federal employees are blowing the whistle on the Internal Revenue Service,
according to a report by Indianapolis television station WTHR-TV.

The scam involves the use of an Individual
Taxpayer Identification Number, or ITIN –a nine-digit tax-processing number
assigned by the IRS to individuals who are obligated to file a federal tax
return but do not have or are not eligible for a Social Security Number. Illegal
aliens may obtain an ITIN by sending the IRS documents such as original or
notarized photocopies of birth certificates, driving records, voter ID cards,
school records and vaccination records – all documents that are easily forged or
falsely notarized.The Center for Immigration Studies reports that in the 2010 tax year alone,
more than 3 million returns were filed with ITINs. Approximately 2.3 million
paid no federal income taxes and also collected a cumulative $4 billion in tax
refunds.According to the news station, which conducted a four-month investigation,
“the ITIN system is plagued by abuse and fraud.”Howard Antelis, a tax examiner at the IRS’ ITIN processing center in Austin,
Texas, explained:“We were being told by upper management to ignore fraud, to
assign ITIN numbers and … pay out refunds to people who are lying. It’s a
license to steal when you allow that.” CLICK BELOW TO READ MORE

A half dozen tax examiners from the Austin office blew the whistle on the IRS
and told WTHR-TV the same story: Every one of them says IRS managers told them
to “look the other way” when they processed ITIN applications that appeared to
be fraudulent or raised suspicion of criminal activity.As one example, Antelis explained that he had been given a stack of ITIN
applications indicating that dozens of dependent children had been attending a
South Carolina school.But he discovered one major problem: The school didn’t exist.Antelis said he told his managers about the false information, but they told
him to approve the applications anyway.“C’mon. This is fraud! Those kids weren’t even real and I’m supposed to give
out [ITIN] numbers?,” Howard said he asked his bosses.

He told the news station, “We’re tax examiners but the truth is we’re not
supposed to look into anything. We’re not supposed to examine anything. It’s
like an assembly line. It’s just ‘Get it out of here. Boom. Boom. Boom. Get it
out of here and don’t worry about the fraud. Fraud slows us down.’”

Antelis said he reported the scams regularly to his managers – for years –
with no result.Frustrated with the inaction, he called the Inspector General’s office in
Washington, D.C.

“I’ve been working for the federal government for 23 years and I signed an
ethical standard of conduct when I went to work that says if you see fraud, you
need to report it,” he said. “I tried and tried and tried, couldn’t get anywhere
so … I went into a quiet room and started making phone calls.”

According to the report, the IG’s office sent auditors to Texas to interview
Howard and dozens of other tax examiners.

The auditors made a shocking discovery: IRS employees were, in fact,
encouraged to overlook indications of fraud.

The IG’s final audit report is expected to be released this summer.WND
reported in May when one Northern California Internal Revenue Service
employee described revelations that millions of illegal aliens are claiming and
receiving billions of dollars in tax refunds for alleged family members in
Mexico using a loophole in the tax code.Then, a WTHR-TV report documented illegal aliens filing the IRS Additional
Child Tax Credit form for children – often nieces and nephews – who have never
lived in the United States. To legally qualify, a child must be present in the
filer’s U.S. residence for over half the year.“We’ve seen sometimes 10 or 12 dependents, most times nieces and nephews, on
these tax forms,” a tax preparer-turned-whistleblower told WTHR News. “The more
you put on there, the more you get back.”

“Here’s a return right here: we’ve got a $10,300 refund for nine nieces and
nephews.”

“We’re getting an $11,000 refund on this tax return. There’s seven nieces and
nephews,” he said, pointing to another set of documents. “I can bring out stacks
and stacks. It’s just so easy it’s ridiculous.”Of course, the problem was not a revelation to the Northern California IRS
field-office worker who viewed the report: “The fraud has been going on for
years,” he told WND. “Business as usual.”“As the video indicates the Service does nothing,” he said, asking WND not
use his name to avoid reprisal.

As a result, illegal aliens who are defrauding the system not only manage to
pay no federal income taxes, their abuse of the credit means they get back
everything they paid into Social Security and more.

But Democrats resisted, and the legislation stalled after only one hearing
before the House Ways and Means Committee.

Ironically, IRS Commissioner Douglas Shulman said in April that paying taxes
should be considered one of the pathways to citizenship for illegal aliens.Based on what comes across the Northern California field-office agent’s desk,
he has seen the problem burgeon in tax returns filed by Spanish-language tax
preparers. Calling them “the enablers and catalyst of this fraud,” he noted
their clients are more comfortable working with preparers who speak their
language. The preparers educate their clients about greater returns they can
receive the following year if they qualify family members for the Additional
Child Tax Credit refund. It’s a win-win-lose – the client learns how to get more
money back from the IRS, the preparer generates good will and repeat business,
and the U.S. taxpayers get soaked. Knowledge of the scam then spreads by word of
mouth.While agreeing the Additional Child Tax Credit was a major problem, he said
it should not be the primary focus.

“When reviewing the big picture of this fraud, always remember and never
forget that it is the ITIN that opens the portal to obtaining the credit,” he
said.

The requirements for obtaining the ITIN for a worker includes submitting
original official documentation from the country of origin to the IRS processing
center in Austin, Texas, for validation.

But, as WTHR-TV reports, the Texas office has many of its own mismanagement
issues, providing more cause for concern.

“It’s pure negligence by management and they’ve been trying to keep it
quiet,” Antelis said. “There is a criminal element that is defrauding the U.S.
government by filing mountains and mountains of these fraudulent applications.
We see them in piles in bulk every day that are obviously not legitimate
documents and not legitimate tax returns and not legitimate wages … and [IRS
managers] don’t want to deal with it. That’s where all the fraud is. The fraud
is in the fake notary stamps and fake documents which we’ve been accepting.”

IRS Deputy Commissioner for Services and Enforcement Steve Miller reportedly
met with 100 tax examiners and said he would address the issues reported by
workers and the news station.According to the report, tax examiners will be given additional training and
tools to help spot fraudulent paperwork, including ultraviolet lights and
magnifying glasses. According to new procedures, illegal aliens will be required
to submit original, certified documents – not notarized copies, which are often
forged.“That’s a huge step in the right direction,” Antelis told the station.
“Because of the Inspector General and all of the media attention, things are
finally starting to change. For the first time in a long time, I feel like this
might get fixed.”

But Antelis said the IRS is retaliating against him for exposing the
fraud.

The agency reportedly cut his job-performance rating from “exceeds fully
successful” to “minimally successful,” reducing the size of his paycheck and
causing him to wonder whether he will lose his job for speaking out.

“I’m a little nervous, but not really. I guess they could try to fire me, but
I don’t think they will,” he said. “I just want to see things fixed. We’ve been
allowing the U.S. taxpayer to get robbed for years now and those days appear to
be over.”

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